Britvic posts rise in Q1 revenue, highlights drinks levy uncertainty

FTSE 250 soft drinks maker Britvic posted a 3.3% jump in first-quarter revenue on Wednesday as it highlighted uncertainty from the introduction of the soft drinks levy.

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Revenue rose to £337.2m, but on an organic basis excluding the acquisition of Bela Ischia, it was up a more modest 0.7%.

GB revenue increased 1% as GB carbonates continued to outperform the market, with revenue in the division up 4.9% thanks to the continued success of Pepsi MAX. However, revenue in the stills unit fell 6.6%, with a volume decline of 4.4%.

Britvic said it’s launching the more premium Robinsons ‘Fruit Creations’ and ‘Cordials’ ranges into grocery in the second quarter, supported by a multichannel advertising campaign. It pointed out that with Palmer and Harvey entering administration, it has absorbed a number of one-off costs, although it does not expect any longer-term impact with its customer base now being supplied by other wholesalers.

Revenue in France fell 5% in a subdued market, compared to a 6.3% jump in the same quarter a year ago, while international revenue declined 8.1% versus a 19.8% increase last year.

In Ireland, revenue was up 16.5% thanks to the acquisition of East Coast in the second quarter of last year, while revenue in Brazil rose 22.6% on the back of the Bela Ischia acquisition, also in the second quarter. However, organic revenue fell 6.5%, reflecting the continuation of the “challenging” consumer environment.

Chief executive Simon Litherland said: “We have delivered a solid start to the new financial year, with group revenue growing 3.3% ahead of a strong first quarter last year. As we said at our preliminary results, the introduction of a soft drinks industry levy in the UK and Ireland brings a level of uncertainty, but we are well placed to navigate this given the strength and breadth of our brand portfolio and exciting marketing and innovation plans.

“In addition, our continued focus on revenue and cost management and the delivery of the final phase of our business capability programme means we remain confident of making further progress in 2018.”

Britvic also said on Wednesday that the collective consultation on the proposed closure of its Norwich factory has ended and the site will close in 2019. It added that every effort will be made to support affected employees to find new roles or alternative employment.